What is a debit card?

Millions of Americans have both debit and credit cards, and may not necessarily know the difference between the two.

The simplest way to explain is to say that debit cards allow you to only spend as much money as you have in a bank account, while a credit card will let you rack up as much debt as the total credit limit. This is an important distinction, because credit cards will lead consumers to rack up debt - and potentially damage their credit scores - while spending only as much as is available might be a better financial option for some consumers.

The reason it's imperative for people to know the difference is because of just how interchangeably they can be used in many situations. But choosing debit over credit unless absolutely necessary is often a wiser idea for people trying to keep their ongoing monthly costs as low as possible. That way, you'll know you're going to have some sort of spending limit that won't put you in debt.